Farmers tell manufacturers how and why they buy new equipment

When a few hundred staff and executives from the Canadian equipment brands that belong to AMC, the Agricultural Manufacturers of Canada, gathered for their 48th annual convention in Winnipeg in December, they used the opportunity to find out a bit more about their customers.

AMC organizers had invited producers from different segments of the farming community to sit on a discussion panel during the conference, and I had the privilege of moderating that panel.

It was a great opportunity for the people who build farm implements and belong to AMC. It was their chance to hear from — and ask questions of — a representative sample of the producers who ultimately buy their equipment.

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When it comes to buying new or used machinery, what factors influence farmers’ decision-making? What influence, if any, is digital technology having on their operations?

That’s what manufacturers wanted to hear their customers talk about.

I put the questions to the three people on the panel — a dairy farmer, a corn and soybean grower, and a rancher — to find out more about what goes into their equipment decisions.

Not surprisingly, each panelist had developed their own unique approaches to addressing common industry problems on their specific operations.

“For the big things, the tractors, combines, planters, things like that, we have a plan,” explained Warren McCutcheon, a corn and soybean grower from southern Manitoba who operates on a relatively large scale. “Every few years, things are in a rotation, and we’ll take care of it that way.”

To hear that his operation, like so many others, struggles with the challenge of finding employees wasn’t a surprise, and McCutcheon said his operation compensates for that labour shortage with its selection of equipment.

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“We’re over-equipped compared to some guys,” McCutcheon said. “But we’re under-equipped with regard to labour, so we make up for it with bigger machinery, better, newer stuff that runs all the time.”

For Anton Borst, too, finding skilled labour is “definitely” a challenge. His family runs Halarda Farms, also in Manitoba, that milks almost 1,000 cows and is in the process of expanding beyond that.

But the Borst family takes a slightly different tack when it comes to their machinery strategy.

“If we decide that we need a new piece of equipment, if it’s a tractor, it’s going to be a John Deere,” he said. “It’s not because we bleed green or anything. When we buy a tractor it will have 2,000, 3,000, 4,000 hours. We have units running that have 30,000, 35,000 hours. For us the equipment you run is a need. You want to keep it in good enough shape that it’s running right, but it’s definitely not a showpiece.”

It means that for the Borsts, a robust preventative maintenance plan for those higher-hour machines is key to keeping their fleet running.

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When it comes to lower-value implements, however, their strategy is similar to the other panellists: they find exactly what works best for the job and they buy it wherever it’s available.

“If it’s not a tractor, it’s every shape and color that’s out there,” Borst said. “A lot of it will be short-line equipment. We search very specifically for exactly the job we want done on the farm. It becomes very specific. We pick up the piece that we think works the best.”

That is possible because, unlike tractors, combines or other powered equipment, basic implements have few complex maintenance problems, so there is a much-reduced need for dealer support.

But keeping a good relationship with a dealer for maintenance and support of high-value machines remains key for Borst.

“We have a good relationship with our local dealer, if we need service,” Borst said. “With the people we work with, we want to keep long-term relationships if at all possible.”

That relationship word came up a lot with all the panelists, and figured prominently in all their purchasing decisions. Adrienne Ivy, whose family operates a large ranching operation in Saskatchewan, said that while producers in the cattle industry typically don’t have the same need for a large stable of high-value equipment as dairy operators or grain growers, a relationship with an equipment dealer is important for a different reason.

“I would say we have different struggles with our dealer relationship than you guys would,” she said. “It’s because the majority of things we buy are smaller line items. One of our greatest struggles sometimes, honestly, is just getting a quote. In a world of salesmen selling $500,000 combines, they really don’t care about the smaller items that are important to our business yet aren’t close to the same value of commission they would make on anything else. So for that reason, we fall back to the same position that relationships are so important. You still buy from people, not from businesses.”

And while many might be surprised by it, Ivy said, digital technology on their equipment is becoming an ever-greater asset, even on a ranching operation.

“I think some of us had a laugh last night talking about our seeder, which is a 15-foot disc drill that we seed 2,000 acres with,” she continued. “It’s very old school, but at the same time we seed everything with GPS and autosteer. On our operation it’s the perfect mash of everything. We will integrate technology every spot we can where it fits with what we have.”

Getting machines of vastly different ages to work together does pose a challenge, though.

“It’s a little harder for us to keep everything adaptive and connecting together with the range of ages of equipment we use,” she continued. “But we really see value in technology and are always looking for ways we can use it better.”

McCutcheon says the digital component has gained in importance on his operation too.

“We’re fully into GPS and technology and finding ways of using it better,” he said. “We use yield mapping data, imagery, fertilizer recommendations and things like that. If you’re not using technology like that, you’re probably not giving yourself the best chance to be successful. Those tools are there. They work.

“GPS is incredible technology. We’re using sectional control. At $100-an-acre corn seed costs, if you have three or four acres of overlap in a field, it doesn’t take long to pay for that technology.”

Likewise, Borst’s dairy operation has seen a significant efficiency boost from the information gathering capabilities of today’s barn equipment, helping them keep track of individual animal performance and health.

“Quite often, these machines produce a tremendous amount of data, giving a lot of information on the cows,” he said. “So we really use them to manage the herd. And it gives us lots of opportunities to better manage our animals. It allows us to better manage individuals, and identify sick cows and that kind of thing.”

But to get the full value out of that equipment, farmers need to focus on fully integrating all the data it can provide into management decisions, he noted.

“It’s one thing to invest the money to adopt technology, the danger is not to make full use of it,” Borst said.

Given the increased recognition of the value of the digital component on almost all of today’s equipment, along with the desire to have an enduring relationship with a dealer, farmers and ranchers may find themselves cemented even more solidly into ongoing partnerships with dealers.

Said McCutcheon, “If you’re locked into green GPS, you’re not going to go buy a red tractor. Even if that tractor is superior, you’re probably going to stick with what your GPS and what your system works in. That’s how integrated those things are. If you’re spending $100,000 on your farm on GPS, you’re probably not going to stray from that colour equipment.”

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